We’ve gathered information on the best performing 10 pay whole life products for 2015 looking at cash value rate of return.
As a quick review 10 Pay Whole Life Insurance requires just 10 premium payments. After those 10 payments it is contractually paid up requiring no further premiums. Agents and brokers often use this product for its higher than average cash accumulation capabilities and for the very short time period of premium commitment.
Today we’re releasing results on how non-blended 10 pay’s compare across nine different companies.
Using results for a hypothetical male and female ages 45 and 55 $1,000,000 death benefit preferred risk class, we’ve calculated internal rate of return (i.e. compound annual growth rate) of cash surrender value at years 10 and 20; here are the results:
We had to drop Ohio National in the age 55 comparisons, as they do not issue their 10 Pay product at this age. We are aware of the Prestige MAX product we could use as a replacement, but it’s paid up in 11 years if the insured is issue age 55 so it does not quite fit correctly.
Penn Mutual takes the top spot more times than any other carrier with MassMutual and MetLife close behind (especially when looking at year 20). Ohio National performs very well in the first 10 years and lags a bit come year 20, but still maintains a very narrow margin between it and the top performers.
Based on these results we feel it’s difficult (and also incorrect) to really declare a winner, but rather break the carriers into two groups of winners and losers.
In the winners category we’d include: MassMutual, MetLife, Ohio National, and Penn Mutual.
In the losers category we’d include: Guardian, New York Life, Northwestern Mutual, Saving Bank Life of Massachusetts, and Security Mutual Life.
A lot of these products are new for this year or 2014 and as a result none of this information is intended to influence purchases made prior. Some companies did not have 10 Pay products prior to this and some company’s predecessor products would have performed better than current products.
As I mentioned above, none of these products were blended and it’s likely that blending would have changed results. Several of these products do not allow blending and for this and several other reasons we will not be making a comparison including that element at this time.
Brandon launched the Insurance Pro Blog in July of 2011 as a project to de-mystify the life insurance industry. A specialist in the design and application of life insurance cash accumulation features, Brandon is one of the foremost authorities on the subject of coordinating life insurance cash values in a financial plan.